InvestEU aims to be a fund that provides support to EU investors by integrating and simplifying the financing, offered under a single budgetary guarantee scheme.
On Wednesday evening, MEPs from the Budgetary and Economic and Monetary Affairs committees adopted with 71 votes to 17 and 7 abstentions the renewed EU programme to support investments and guarantee access to finance. It will address market failures, sub-optimal investments and the investment gap in targeted sectors, for the period 2021-27.
Six policy objectives mirroring key EU priorites
The EU guarantee of around €91.8 billion (current prices) is expected to mobilise more than €1 200 billion in additional investment across the European Union and should be allotted to the following policy objectives:
1.Solvency support: MEPs reintroduced this, as not all companies have the same level of access to market financing and certain member states may not have sufficient budgetary means available to provide adequate support to companies hit by the COVID-19 crisis. It will help recovering companies, safeguard employment levels, and counter-balance the expected distortions in the single market (up to around €11 billion);
2.Sustainable infrastructure: investment in the areas of sustainable transport and road safety, rail and road infrastructure, renewable energy, energy efficiency renovation projects, digital connectivity, environmental and climate resilience research (up to around €20 billion);
3.Innovation and digitisation (up to around €11 billion);
4.Access to finance primarily for SMEs, including for innovative SMEs and SMEs operating in the cultural and creative sectors, as well as small mid-cap companies (up to €5 billion);
5.Social investment and skills (up to around €6 billion);
6.Strategic European investment: future-oriented investment, including in critical healthcare, manufacturing of medicinal products and critical infrastructure, whether physical, analogue or digital (up to around €31 billion);
Background
Despite numerous initiatives to address the situation, there is still a significant investment gap in the EU. The InvestEU programme (part of the MFF 2021-2027 package “EU budget for the future”) aims to deal with this problem.
InvestEU would bring together the various EU financial instruments currently available, including: the European Fund for Strategic Investments (EFSI); the Connecting Europe Facility instruments; specific facilities under the Competitiveness Of Small and Medium-Sized Enterprises (COSME) programme; as well as specific guarantees and facilities under the Employment and Social Innovation programme (EaSI). Together, these will benefit from economies of scale, and expand the Juncker Plan’s model (i.e. using guarantees from the EU budget to bring in other investors).
InvestEU will consist of the InvestEU Fund, the InvestEU Advisory Hub, and the InvestEU Portal (More information).
Next steps
Parliament will vote on its mandate to start negotiating with EU governments during the session in November.
*Source: European Parliament
By: N. Peter Kramer
